Gold - Tightenning range! ST - maybe long, LT - rather Short!
In fact the long term outlook can be really worrysome for the Bulls. To see the bigger picture I will also include a weekly chart this time.
In fact Gold has been one of the most boring instruments during last six months. It is not trending at all. Most of the time it is trading +/- around the Kumo, or we can say around an equilibrium range of 1280-1340. Compared to Golds history, it is an extremely thin range. What's more, we have two trend lines forming a tightenning triangle. Price will have to decide which way to finally break out, and I looking at the forward cross point, this breakout will happen before year 2014 ends.
If we check the indicators, chances of higher prices (some bullish bias) slightly improved for the short term, but the undecision is still here. Actually volatility shows the same, ATR is very low. It seems like no one really cares about Gold, or no one really knows what to do with it. Everybody just waits... so do I.
Daily: DMI-ADX shows total trendless mkt. DMI changes quite often (actually trying to switch to bullish), ADX is very low. MACD is kind of flat, with some possibility to cross bullish, but nothing major here. Slow Stoch is bullish, this can be important when mkt is rangebound.
Ichimoku - Tells us this mkt is not trending! Price is hoovering ard the Kumo, at moment it is below it, but as we saw last time, it can quickly change. Chikou Span always hits Price candles. Chikou actually once is above once is below Price, but can not get above or below the Kumo to gove a trending confirmation signal. Tenkan and Kijun are also in the Kumo, and the Kumo lines are both flat, the cloud is pretty thin. So basically this means the 9, 26, the 17,5 and the 52 days averages are approximately all ard same levels now between 1285-1310! Total trendless as I said. The funniest is the future Cloud. Senkou A (17,5 days avg green line) points down, while Senkou B (52 days avg - orange line) points up a bit, still making a bearish Senkou cross.
4 Hrs: Price is in the Kumo, means consolidation. 100 WMA got flat, also means the move is just sideaway. Short term Bullish momentum can gain only with a break above 1296. The lower support, and the most important level for Bulls is 1275-1278.
Weekly: Here is the big question mark! Actually both price action and DMI-ADX clearly shows it has stopped trending really. After the major weekly break of 1600 Gold had a nice weekly bearish move, which was followed be one Kijun Sen retest (15/07/2013 - 02/09/2013), a Kumo retest (Jan/2014 - March/2014) and now again up to the Kumo cloud.
Maybe it will try to penetrate the Kumo again, as you see the weekly equilibrium price is clearly ard 1300 now.
The problem is that right now both Slow Stoch and MACD is bearish, and the trend + horizontal support is very close. Also, the pattern looks like a bear flag, the probility from this pattern is a bearish continuation.
Once it closes below 1270 on the weekly chart, it will quickly attack 1200. If 1200 once will be gone, then measured tgt of the bearish continuation move would be really deep, somewhere ard 870-900 USD.
Summary: Very short term we may see some bullish bias and one more attempt to break above 1300, but looking at the weekly time frame the cloud is thick above the price and for the long term chances are better for a bearish continuation. What so ever is going to happen, Gold holders must watch 1270 as a last support! Once Gold breaks and closes below that, it will continue bearish trending for long time, thus the strategy will be a sell on spikes.
In fact Gold has been one of the most boring instruments during last six months. It is not trending at all. Most of the time it is trading +/- around the Kumo, or we can say around an equilibrium range of 1280-1340. Compared to Golds history, it is an extremely thin range. What's more, we have two trend lines forming a tightenning triangle. Price will have to decide which way to finally break out, and I looking at the forward cross point, this breakout will happen before year 2014 ends.
If we check the indicators, chances of higher prices (some bullish bias) slightly improved for the short term, but the undecision is still here. Actually volatility shows the same, ATR is very low. It seems like no one really cares about Gold, or no one really knows what to do with it. Everybody just waits... so do I.
Daily: DMI-ADX shows total trendless mkt. DMI changes quite often (actually trying to switch to bullish), ADX is very low. MACD is kind of flat, with some possibility to cross bullish, but nothing major here. Slow Stoch is bullish, this can be important when mkt is rangebound.
Ichimoku - Tells us this mkt is not trending! Price is hoovering ard the Kumo, at moment it is below it, but as we saw last time, it can quickly change. Chikou Span always hits Price candles. Chikou actually once is above once is below Price, but can not get above or below the Kumo to gove a trending confirmation signal. Tenkan and Kijun are also in the Kumo, and the Kumo lines are both flat, the cloud is pretty thin. So basically this means the 9, 26, the 17,5 and the 52 days averages are approximately all ard same levels now between 1285-1310! Total trendless as I said. The funniest is the future Cloud. Senkou A (17,5 days avg green line) points down, while Senkou B (52 days avg - orange line) points up a bit, still making a bearish Senkou cross.
4 Hrs: Price is in the Kumo, means consolidation. 100 WMA got flat, also means the move is just sideaway. Short term Bullish momentum can gain only with a break above 1296. The lower support, and the most important level for Bulls is 1275-1278.
Weekly: Here is the big question mark! Actually both price action and DMI-ADX clearly shows it has stopped trending really. After the major weekly break of 1600 Gold had a nice weekly bearish move, which was followed be one Kijun Sen retest (15/07/2013 - 02/09/2013), a Kumo retest (Jan/2014 - March/2014) and now again up to the Kumo cloud.
Maybe it will try to penetrate the Kumo again, as you see the weekly equilibrium price is clearly ard 1300 now.
The problem is that right now both Slow Stoch and MACD is bearish, and the trend + horizontal support is very close. Also, the pattern looks like a bear flag, the probility from this pattern is a bearish continuation.
Once it closes below 1270 on the weekly chart, it will quickly attack 1200. If 1200 once will be gone, then measured tgt of the bearish continuation move would be really deep, somewhere ard 870-900 USD.
Summary: Very short term we may see some bullish bias and one more attempt to break above 1300, but looking at the weekly time frame the cloud is thick above the price and for the long term chances are better for a bearish continuation. What so ever is going to happen, Gold holders must watch 1270 as a last support! Once Gold breaks and closes below that, it will continue bearish trending for long time, thus the strategy will be a sell on spikes.
